Plan for state budget counts on steep cuts

by Mary Jo Pitzl - Mar. 9, 2010 12:00 AMThe Arizona Republic

Lawmakers are poised to vote this week on a state budget that would eliminate health-care coverage for 47,000 children, remove 310,000 Arizonans from the state's Medicaid program and shift juvenile corrections to the counties.

And that's the kinder, gentler version of the fiscal 2011 budget.

Lawmakers based the plan on the assumption that voters will approve a temporary 1-cent-per-dollar increase in the state sales tax on May 18. If they don't, an alternative plan released Monday would cut an additional $918 million from the budget, with education - from K-12 to universities - absorbing 60 percent of the amount.

Residents will get their only chance to comment on the $8.9 billion budget and its myriad spending cuts in hearings today They start at 9:30 a.m. The budget has been worked out behind closed doors, with no public testimony and no input this year from agency directors. Lawmakers are hoping to wrap up work this week, although it was unclear whether they had the votes.

The budget tackles two budget years at once, erasing a $700 million deficit in this year's budget, as well as a $2.6 billion deficit for fiscal 2011.

The budget is an agreement between Republican Gov. Jan Brewer and the Republican legislative leadership; Democrats rejected invitations to submit their own budget, saying they wanted to be part of bipartisan talks.

Senate Appropriations Chairman Russell Pearce said that even as the Legislature wrestles with record-setting deficits, the budget does not do long-term damage and relies on a boost in sales-tax revenue to protect the state's priorities of education and public safety.

"Nobody's disbanding or dismantling the state," said Pearce, R-Mesa.

But people on the receiving end of those cuts paint a different picture.

From health-services cuts to public safety to services for Arizona's poor, advocates say the state is moving too far, too fast. Even if the sales tax passes, the cuts they are complaining about will happen if lawmakers approve the plan released Monday.

Don Stapley, chairman of the Maricopa County Board of Supervisors, called the plan to have the counties handle the confinement and counseling of juvenile offenders "remarkable and even reckless" and predicted it will lead Maricopa, as well as the other counties, into fiscal crisis. The shift would force them to raise local property taxes, county officials say, as tax-averse lawmakers push unpopular programs onto local governments.

The governor and lawmakers tried to ease the pain by moving the transfer to March 2011, instead of July.

Advocates for Arizona's vulnerable populations complain that the budget proposal harms the poor.

Hospitals officials worry that tightening the eligibility criteria for the Arizona Health Care Cost Containment System, which is expected to exclude 310,000 adults from coverage, will fill emergency rooms with the uninsured. That would create ripple effects throughout the entire health-care system, officials say, from longer waits to higher insurance premiums.

The budget also calls for eliminating KidsCare to save $18 million. The federally subsidized health-care program serves 47,000 children.

Ellen Katz of the William Morrison Institute for Social Justice called a plan to limit temporary cash assistance to poor families to three years, instead of five, an unraveling of the state's safety net.

The fiscal 2011 budget plan depends on $1.1 billion in cuts, $1 billion in new funds (primarily from the tax hike), $60 million in debt, and $487 million in fund sweeps. Most of those sweeps rely on voter approval; they would be asked in November to dismantle the early-childhood program called First Things First that they approved in 2006, as well as 1998's Growing Smarter program, which sets aside money for land conservation.

If voters opt to keep those programs, lawmakers will have to find another $448 million in funds.

"It's a fake budget, designed to tide them over until November," complained Rep. Steve Farley, D-Tucson, referring to this fall's election.

The health-and-welfare cuts, as well as the shift of the Juvenile Corrections Department, have provoked protests. But the budget is packed with numerous proposals to cut spending or boost state revenues. They include:

• Elimination of 2.75 percent in performance pay for state workers.

• An additional furlough day by June 30 for state workers and six furlough days next year. The universities would be exempt because of requirements of federal-stimulus dollars.

• Elimination of the state's all-day kindergarten program.

• A requirement that counties pick up the cost of treating and housing sexually violent people.

• A requirement that the 15 counties send $22 million to the state. In return, the counties would get $20 million from sales-tax dollars that normally would go to the cities.

• Elimination of assistance to local transportation departments for mass transit.

• Elimination of the state Heritage Fund, which pays for parks, wildlife efforts and historic preservation.